In a week filled with earnings news and the announced departure of its CEO (see Daily GPI, Oct. 27), EnCana Corp. on Thursday said it has reached an agreement with some of its affiliates to sell substantially all of its natural gas liquids (NGL) business to Provident Energy Trust for $586 million (C$697 million). The sale is expected to close by the end of the year.

The sales include four NGL plants in Empress, AB, which include a 60% stake in the EnCana Empress Plant. EnCana plans to retain a 10% interest in Empress, but has a put option to sell the interest to Provident for $12.6 million (C$15 million). Other Empress plant stakes to be sold include a 33% stake in the BP E1 plant, a 8.333% stake in the Conoco Empress plant, and a 12.4% stake in the ATCO plant.

EnCana also is selling its 100% stake in the Debutanizer, a 50% stake in the Kerrobert Pipeline and Storage Facility, and an 18.26% interest in the Superior Storage Facility and the Depropanizer. It also will divest its interests in the Sarnia fractionation and storage facilities, sell its 49% interest in the Marysville Underground Storage Terminal and sell 100% interest in Kinetic Resources, which markets NGL.

EnCana also has agreed to provide up to $63 million (C$75 million) in support, via a gas sales contract, in the event the commodity price relationship impacting the NGL business (fractionation spread) drops below historic averages over the next two-year period. EnCana has the opportunity to recover any support drawn over that two-year period plus one additional year.

The sale is part of EnCana's previously announced divestiture program to allow it to focus on its North American natural gas and oilsands resource plays, the company said in a statement. Proceeds fare expected to be directed to debt reduction and "potentially" the continuation of EnCana's share purchase program. TD Securities Inc. served as an adviser to EnCana on this transaction.

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